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Willingness to Pay for Frills When Travelling with Low-Cost Airlines

Author

Listed:
  • Antónia Correia
  • Adriano Pimpão
  • Manuel Tão

Abstract

The success of low-cost companies is based on the economic principle that there is no free lunch. In this paper, by means of a stated preference experiment, the authors examine individuals' preferences for the main attributes defining the service offered by low-cost airlines. The empirical research is supported by a randomly collected sample of 525 passengers travelling to the Algarve for leisure purposes throughout the spring of 2009, using low-cost carriers. The results reveal not only the implicit values of service attributes, but also the preference differences in attributes between passengers. The policy and management implications of these results are discussed.

Suggested Citation

  • Antónia Correia & Adriano Pimpão & Manuel Tão, 2012. "Willingness to Pay for Frills When Travelling with Low-Cost Airlines," Tourism Economics, , vol. 18(6), pages 1161-1174, December.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:6:p:1161-1174
    DOI: 10.5367/te.2012.0175
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    References listed on IDEAS

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    1. Hess, Stephane, 2008. "Treatment of reference alternatives in stated choice surveys for air travel choice behaviour," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 275-279.
    2. Papatheodorou, Andreas & Lei, Zheng, 2006. "Leisure travel in Europe and airline business models: A study of regional airports in Great Britain," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 47-52.
    3. Balcombe, Kelvin & Fraser, Iain & Harris, Liam, 2009. "Consumer willingness to pay for in-flight service and comfort levels: A choice experiment," Journal of Air Transport Management, Elsevier, vol. 15(5), pages 221-226.
    4. Dennis, Nigel, 2007. "End of the free lunch? The responses of traditional European airlines to the low-cost carrier threat," Journal of Air Transport Management, Elsevier, vol. 13(5), pages 311-321.
    5. O’Connell, John F. & Williams, George, 2005. "Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 259-272.
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    Cited by:

    1. Chiambaretto, Paul, 2021. "Air passengers’ willingness to pay for ancillary services on long-haul flights," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).

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